After switching my AIR application into new AIR 2.5 SDK, boom! Every single URLRequest threw an IOErrorEvent. No other exception thrown. So I started digging in in order to find the cause and it appeared to be Security.loadPolicyFile() execution (I am reusing some libs containing these lines) that blocked it all quietly. First I tried to do try-catch block over it, but with no success. Than I just removed the lines for AIR project and voilà, everything back to normal again. URLRequests works again. It seems like AIR does not need loadPolicyFile() for URLRequests at all. Interesting that these loadPolicyFile() were targeting total different domain and were able to break any other requests.